Strategic environmental policy; eco-dumping or a green strategy?

The Porter hypothesis claims that a strong environmental policy best serves the interests of a nation's export industry. While this hypothesis seems to be based on some form of bounded rationality, this paper argues that governments may have good reasons for setting an especially strong environmental policy even though firms are fully rational. If the available abatement technology turns the environment into an “inferior input”, competitiveness is spurred by a strong environmental policy. The government should take advantage of this, and set an especially strict emission quota or an especially high emission tax. The findings in the paper also has consequences for the desirability of international cooperation with respect to national environmental policy. If a strict environmental policy spurs competitiveness, the environment is better protected without cooperation.     

Development of environmental policy,objectives, and targets

This paper describes a process to develop and establish an environmental policy and its associated environmental targets, objectives, and management programmes. The environmental policy is defined in a statement which addresses the company expectations for programmes that are important to assure adequate environmental protection and define its future commitment towards preventing pollution and continuously improving the effectiveness of its environmental protection programmes. A set of environmental objectives, derived from the policy, define the overall goals which will ensure that the company's environmental performance will remain consistent with the commitment identified in its policy when its environmental management system (EMS) is implemented, Environmental targets reflect the requirements and standards that the company must strive to achieve each objective and minimize any harmful environmental impacts from its production and manufacturing processes or other activities. In addition to defining specific targets, environmental management programmes are also used to guide EMS implementation. These programmes, however, must provide the company with the necessary flexibility to select the most appropriate technologies to enhance its own processes and prudently allocate its available financial resources in areas that return the greatest overall environmental benefit.Though they are expected to allow some discretion in the allocation of resources targeted towards environmental protection, EMS programmes must also provide assurance that the corporation environmental policy, objectives, targets, and management programmes do not result in a facility failure to adhere to all of its certification requirements. The principle and factors described in this article should be considered to the extent that they are necessary and practical.     

西部大开发与环境保护政策的取向

实施西部大开发战略是我国跨世纪的重大决策，党中央和国家已将生态建设和环境保护放在十分重要的地位。文章对我国当前的环境保护政策进行了归纳和分析，指出了其中存在的困难和问题在于立法机制不健全、可行性差、与市场机制不相适应等。西部地区应认识和吸取有益经验，制定出与市场经济相适应的环境政策，实现西部地区经济社会与环境的协调发展。     

The Declining Influence of Science On Marine Environmental Policy

Abstract

Differences between the scientific and environmental policy communities regarding marine environmental protection strategies are discussed in the context of the nature and extent of scientific influence on marine environmental policy. Public perceptions of the nature and severity of marine pollution frequently differ from scientific assessments. the thesis of this paper is that the increasing influence of public perception on marine environmental protection policy is leading to the adoption of simplistic and unnecessarily extreme approaches to marine pollution prevention and to a reduced reliance on science. This trend is illustrated by some recent international developments and some suggestions are made towards enhancing the influence of science on marine protection policy.     

The Declining Influence of Science On Marine Environmental Policy

Differences between the scientific and environmental policy communities regarding marine environmental protection strategies are discussed in the context of the nature and extent of scientific influence on marine environmental policy. Public perceptions of the nature and severity of marine pollution frequently differ from scientific assessments. the thesis of this paper is that the increasing influence of public perception on marine environmental protection policy is leading to the adoption of simplistic and unnecessarily extreme approaches to marine pollution prevention and to a reduced reliance on science. This trend is illustrated by some recent international developments and some suggestions are made towards enhancing the influence of science on marine protection policy.     

Green markets, eco-certification, and equilibrium fraud

Consumers voluntarily pay significant price premiums to acquire unobservable environmental attributes in green markets. This paper considers the performance of eco-certification policy under circumstances where consumers cannot discern environmental attributes in goods, but are able to form rational expectations regarding the extent of illicit activities in the green market. The main results are: (i) fraud is less prevalent in green markets when entry barriers limit the number of firms; (ii) conventional environmental policies on polluting techniques increase the incidence of fraud, and can even preclude the use of non-polluting techniques which would otherwise emerge in green markets; (iii) voluntary eco-certification policies can decrease fraud, increase output, and raise profits per firm; and (iv) in cases where the socially optimal resource allocation can be supported, the optimal policy involves negative unit certification fees, positive fixed certification fees and is revenue-generating for the certifying agent.     

Analysis of the current situation of environmental policy of China and establishment of distributed environmental policy framework

In this study, China’s current macro-environmental policies as well as their implementation and management tools are analyzed. By using the basic economic methodology, detailed studies are conducted focusing on the implementation effect of contemporary China’s typical environmental policy of the total pollutant discharge quantity control type, and also the two types of environmental management tools are compared from the perspective of implementation costs and policy uncertainty. By introduction of distributed management tools into the implementation of environmental policies, market-oriented means and the methods of economic analysis are introduced into environmental policy decision-making mechanisms, which could afford a new method for changing the current relatively low efficiency of environmental policy, solving the problem of “government failure” in environmental policy implementation, and providing a new way to make environmental policy system more flexible and more efficient. It is of great practical significance to solve China's current structural, complex and accumulative environmental problems.     

The transition from dirty to clean industries: optimal fiscal policy and the environmental Kuznets curve

This paper investigates privately and socially optimal patterns of economic development in a two-sector endogenous growth model with clean and dirty goods. We consider a second-best fiscal policy framework in which distortionary taxes jointly influence economic growth and environmental quality. In this policy setting, three conditions produce an Environmental Kuznets Curve (EKC): (i) dirty output is bounded; (ii) clean output grows endogenously; and (iii) growth in the dirty sector reduces growth in the clean sector. These conditions do not arise with a consumption externality, but can emerge with a production externality. Endogenous labor supply implications are also investigated. Although not necessary for producing an EKC, endogenous labor supply provides additional linkages that produce an EKC under circumstances in which it would otherwise not appear.     

Environmental policies and productivity growth: Evidence across industries and firms

This paper investigates the impact of changes in environmental policy stringency on industry- and firm-level productivity growth in a panel of OECD countries. To test the strong version of the Porter Hypothesis (PH), we extend a neo-Schumpeterian productivity model to allow for effects of environmental policies. We use a new environmental policy stringency (EPS) index and let the effect of countries׳ environmental policies vary with the pollution intensity of the industry and with the countries’ and firms’ technological advancement. A tightening of environmental policy is associated with a short-term increase in industry-level productivity growth in the most technologically-advanced countries. This effect diminishes with the distance to the global productivity frontier, eventually becoming insignificant. For the average firm, no evidence of PH is found. However, the most productive firms see a temporary boost in productivity growth, while the less productive ones experience a productivity slowdown.     

Conservation Science and Forest Service Policy for Roadless Areas

Abstract:  Questions persist regarding whether the science of conservation biology can successfully affect environmental decision making. One of the most prominent fields of intersection between conservation science and environmental policy is public-lands debates in the United States. I reviewed the role of conservation science in the roadless-area policies of the U.S. Forest Service. Since 1971, the Forest Service has systematically evaluated roadless areas on national forests three times, most recently during the Clinton administration's Roadless Area Conservation Review (1998–2000) ( U.S. Department of Agriculture Forest Service 2000b ). Drawing on the agency's environmental impact statements and supporting documents and the internal records of conservation organizations, I examined the changing goals, methodology, and outcome of roadless-area advocacy and policy. Since the 1970s, conservation science has successfully informed public and administrative concern for roadless-area protection. Conservation science has transformed public discourse regarding roadless areas and has changed the scope and rationale of national conservation organizations' goals for roadless-area policy from protecting some to protecting all remaining national forest roadless areas. The Forest Service has increasingly drawn on the lessons of conservation biology to justify its methodology and its administrative recommendations to protect roadless areas. The 2000 Roadless Area Conservation Review resulted in a recommendation to protect all remaining national forest roadless areas, up from 22% of roadless areas in the first roadless review. Despite the scientific merits of recent roadless-area advocacy and policy, however, such initiatives have faced political difficulties. The emphasis on large-scale, top-down, national approaches to conservation policy has rendered such policies politically problematic.     

美国的环保政策及对环保产业发展的影响

美国的环保政策是一种经济发展政策 ,强调在提高美国工业竞争力和维护社会经济繁荣的基础上加强环境保护 ,强调通过环保技术的开发和应用实现具体的环保目标 ;措施上它强调灵活性、创新性、多样性和公众的自觉参与 ,创造了环保产业宽松和不断创新的环境。     

Emissions standards and ambient environmental quality standards with stochastic environmental services

Many important environmental policies involve some combination of emission controls and ambient environmental quality standards, for instance SO₂ emissions are capped under Title IV of the U.S. Clean Air Act Amendments while ambient SO₂ concentrations are limited under National Ambient Air Quality Standards (NAAQS). This paper examines the relative performance of emissions standards and ambient standards when the natural environment provides stochastic environmental services for assimilating pollution. For receiving media characterized by greater dispersion in the distribution of environmental services, the optimal emissions policy becomes more stringent, whereas the optimal ambient policy generally becomes more lax. In terms of economic performance, emissions policies are superior to ambient policies for relatively non-toxic pollutants, whereas ambient standards welfare dominate emissions standards for sufficiently toxic pollutants. In the case of combined policies that jointly implement emissions standards and ambient standards, we show that the optimal level of each standard relaxes relative to its counterpart in a unilateral policy, allowing for greater emissions levels and higher pollution concentrations in the environmental medium.     

Double-dipping in environmental markets

There is an increasing tendency to use markets to induce the provision of environmental services. As such markets increase in scope, potential market participants might sell multiple environmental services. The question we consider here is whether participants in such markets should be allowed to sell credits in more than one market simultaneously. Some have argued in favor of such “double-dipping”, because it would make the provision of environmental services more profitable. In practice however, most programs do not allow double-dipping. We show that if the optimal level of pollution abatement is sought, then double-dipping maximizes societal net benefits. However, if pollution policies are set in a piecemeal fashion, then the caps for each market are unlikely to be optimal and, in this second-best setting, a policy prohibiting double-dipping can lead to greater social net benefits. We explore conditions under which a single-market policy is preferred, or equivalently, where piecemeal policies are likely to yield particularly inefficient outcomes.     

Strategic climate policy with offsets and incomplete abatement: Carbon taxes versus cap-and-trade

This paper provides a first analysis of a “policy bloc” of fossil fuel importers which implements an optimal climate policy, faces a (non-policy) fringe of other fuel importers, and an exporter bloc, and purchases offset from the fringe. We compare a carbon tax and a cap-and-trade scheme for the policy bloc, in either case accompanied by an efficient offset mechanism for reducing emissions in the fringe. The policy bloc is shown to prefer a tax over a cap, since only a tax reduces the fuel export price and by more when the policy bloc is larger. Offsets are also more favorable to the policy bloc under a tax than under a cap. The optimal offset price under a carbon tax is below the tax rate, while under a cap and free quota trading the offset price must equal the quota price. The domestic carbon and offset prices are both higher under a tax than under a cap when the policy bloc is small. When the policy bloc is larger, the offset price can be higher under a cap. Fringe countries gain by mitigation in the policy bloc, more under a carbon tax since the fuel import price is lower.     

Is Chinese trade policy motivated by environmental concerns?

This paper analyses whether China's export VAT rebates and export taxes are driven by environmental concerns. Since China struggles to enforce environmental regulation, trade policy can be used as a second-best environmental policy. In a general equilibrium model it is possible to show that the second-best export tax increases in a product's pollution intensity. The empirical analysis investigates whether the export tax equivalent of partial VAT rebates and export taxes are higher for products which are more pollution intensive along several dimensions. The results indicate that the VAT rebate rates are set in a way that discourages exports of water pollution intensive, SO₂ intensive and energy intensive products from 2007 on. Moreover, the conservation of natural resources such as minerals, metals, wood products and precious stones seems to be a key determinant of China's export VAT rebate rates. There is little evidence that export taxes are motivated by environmental concerns.     

Pollution incidence and political jurisdiction: evidence from the TRI

Few issues are more contentious for local communities than industrial pollution. When local industries pollute, lawmakers and regulators must balance two primary concerns: economic prosperity and the environment. The role of political pressure is well documented in environmental policy. What is less clear is the role jurisdictional or boundary considerations play in determining the implementation of environmental laws. Anecdotal evidence suggests that local regulators are more lenient in their treatment of polluters when the incidence of pollution falls partially on those outside the state. One explanation for such behavior is that regulators take actions to maximize political support. This paper tests this jurisdictional model using toxics release inventory (TRI) data from 1987 to 1996. We find that facilities’ emissions into the air and water are systematically higher in counties that border other states. These results are consistent with the hypothesis that jurisdictional considerations are an important determinant of pollution incidence.     

Transitional politics: emerging incentive-based instruments in environmental regulation

This paper proposes a positive theory of environmental instrument choice. We study a democratic society that seeks to lower the level of pollution from industrial sources to a pre-specified target. The target can be implemented by one of three instruments: [S]: uniform emission standards; [P]: tradeable permits; and [T]: emission taxes. The conflict of interest between special-interests, representing polluters, and the electorate is resolved by an elected politician. We characterize when each of the three policy instruments is chosen in political equilibrium and show that the transition, observed in many countries, from [S] to either [P] or [T] can be understood as a natural consequence of increasingly ambitious environmental targets.     

Vertical fiscal externalities and the environment

We show that imposition of a state-level environmental tax in a federation crowds out pre-existing federal taxes. We explain how this vertical fiscal externality can lead unilateral state-level environmental policy to generate a welfare gain in the implementing state, at the expense of other states, even absent any environmental benefits. Using a computable general equilibrium model of the Canadian federation, we show that vertical fiscal externalities can be the major determinant of the welfare change following environmental policy implementation by a state government. Our numerical simulations indicate that – as a consequence of vertical fiscal externalities – state governments can reduce greenhouse gas emissions by over 20 percent without any net cost to themselves.     

Trade liberalization, corruption, and environmental policy formation: theory and evidence

This study explores the linkages between trade policy, corruption, and environmental policy. We begin by presenting a theoretical model that produces several testable predictions, including: (i) the effect of trade liberalization on the stringency of environmental policy depends on the level of corruption; and (ii) corruption reduces environmental policy stringency. Using panel data from a mix of developed and developing countries from 1982 to 1992, we find evidence that supports these conjectures. We view these results as representing an attempt at understanding the myriad of complex relationships that exist in an open economy.     

Societal change and the control of deforestation in Thailand

Thailand underwent a major shift in forest policy in the second half of the 1980s to promote sustainable management and control of deforestation. This paper puts this in the context of earlier changes in forest policy and analyses the underlying causes of the shift by analysing changes in the relative strength of different interest groups within the framework of a policy pressures model. Internal pressures had a stronger impact on Thai forest policy than external pressures. Protectionist groups became more numerous and more powerful in Thailand in the 1980s in relation to exploitative groups, and their rise in influence was facilitated by continuing progress in democratization and pluralization, linked to the consequences of economic development. Such political change could help to explain the apparent link between better environmental management and economic development shown in the Environmental Kuznets Curve.